NY subpoenas Bank of America board members on Merrill
Two with Hub ties said to be on list
NEW YORK - Capping a week of scrutiny for Bank of America, New York Attorney General Andrew Cuomo took another swing yesterday at uncovering which of the bank’s executives knew about large losses and bonus payouts at Merrill Lynch just before the two banks merged. last year.
Cuomo issued subpoenas to five current and former directors of the bank as part of his ongoing inquiry into its hastily arranged takeover of Merrill, a person briefed on the investigation said.
A second person briefed on the inquiry said the directors who had received subpoenas included members of the firm’s audit committee, which was responsible for reviewing significant legal matters.
Both the individuals who had been briefed on the inquiry asked not to be identified because they had signed confidentiality agreements involving the matter.
The subpoenaed board members include Thomas J. May, head of the Boston utility company NSTAR; William Barnet III, a real estate executive and the mayor of Spartanburg, S.C.; John T. Collins, a venture capital investor based in Boston; Tommy R. Franks, the retired four-star Army general; and Walter E. Massey, the former president of Morehouse College in Atlanta, this person said.
Cuomo’s office wants to know whether Bank of America’s board knew of additional losses discovered at Merrill after the merger was signed, as well as billions of dollars in bonus payments made to Merrill executives before the deal closed.
Based on earlier interviews with the bank’s executives, investigators believe the bank’s audit committee and other directors might have known about losses and bonus payments before shareholders voted to approve the deal in early December, this person said.
The scrutiny comes as Bank of America, which has accepted $45 billion in government bailouts, faces mounting pressures over its merger with Merrill.
This week, Judge Jed S. Rakoff rejected a settlement that would have put an end to a Securities and Exchange Commission investigation into possible securities violations by the bank in the Merrill deal.
